I've heard some talk about the U.S. housing market being "not that bad" or headed for a "turnaround", but that's just not remotely true. Even if all the abysmal reports on falling housing starts (July '08 housing starts hit their lowest level in 11 years), plummeting prices, soaring inventories of unsold homes, etc., aren't enough, new foreclosures in the U.S. hit over 272,000 in July 2008. That's 55% higher than in July '07. So the market is being flooded with newly repo'ed homes for sale while prices skid lower and lower...in anyone's book, this does not make for a very bullish view of the housing market.
You could make the argument that this combination of factors makes real estate look pretty attractive as an investment (instead of the toxic recipe for disaster it actually is). There's some good logic there; as we all know, it's good to buy low and sell high. The only question is whether current prices are "low" or "high". Historically speaking, prices are still very, very high...coming off the bubble we're leaving, prices are going to have to fall a lot more than they already have before they qualify as "low".